During an interview with Sonali Basak from Bloomberg TV on April 9, 2024, Marathon Digital (NASDAQ: MARA) CEO Fred Thiel provided insights into the evolving landscape of Bitcoin mining and the expected impacts of the upcoming Bitcoin halving, projected around April 20.
Thiel highlighted the influence of the U.S. SEC's approval of spot Bitcoin ETFs in January on the cryptocurrency market. He noted that the successful launch of these ETFs has attracted significant capital, potentially expediting the price appreciation typically observed after a halving event. Thiel suggested that the ETF approval has brought forward the expected price appreciation, which would usually occur three to six months post-halving.
In preparation for the halving, Marathon Digital has made strategic moves to optimize its operations. The company has transitioned from an asset-light model to acquiring more control over its mining facilities. Thiel explained that Marathon now owns over 53% of its facilities, allowing for cost reduction and improved efficiencies by eliminating reliance on third-party services for infrastructure.
Regarding the cost of mining and operational efficiency, Thiel disclosed that Marathon's average cost to mine one Bitcoin is in the low $20,000 range, inclusive of energy and operational overhead. With the halving approaching, he anticipates this cost to double due to increased energy requirements per Bitcoin mined, while operational expenses such as personnel remain constant.
International Expansion and Technological Innovations: Looking ahead, Thiel revealed plans for international expansion to diversify Marathon’s operational base and reduce reliance on any single geopolitical area. He also emphasized Marathon’s investment in a vertically integrated technology stack and innovative cooling technologies, which could have applications beyond cryptocurrency mining.
Sustainability and Future Outlook: A significant part of the interview focused on the sustainability of mining operations. Thiel introduced an intriguing concept of “energy harvesting,” which involves using methane gas from landfills, biomass from various industrial processes, and other sources to power mining operations. This approach apparently not only reduces the cost of energy but also leverages the heat generated from mining to serve industrial needs, creating a symbiotic relationship between crypto mining and other industries.
Impacts of the Halving: The halving will reduce the daily Bitcoin emissions, which poses challenges and opportunities for miners. He said, “The halving event will reduce the supply of Bitcoin by about 450 a day, the new emissions of Bitcoin, which will have some small impact on price most probably. But as miners, we’re very excited to go into a halving where, for once, the price has not declined prior to the halving but rather has gone up.” Thiel anticipates that less efficient miners may struggle, potentially leading to acquisitions and further consolidation in the industry. He also expects this will spur technological advancements and operational optimizations among surviving firms.
April 2024, Cryptoniteuae